Talk to an Intellectual Property Lawyer

It takes a good deal of time, money, and effort to get a patent. Is it worth it? In other words, what is a patent good for?

Quite simply, a person or company that obtains a valid patent and has
the means to enforce it has the exclusive right to make, use and sell
the invention described in the patent. It can exclude all others from
the field and manufacture and sell the invention itself, or license it
to others. In effect, the patent provides a potential monopoly on the
invention for the length of the patent. No other form of intellectual
property -- trade secrets, trademarks or copyrights -- provides such an
expansive monopoly.

The potential power of a patent is well illustrated by a famous
patent case involving the Kodak and Polaroid corporations. Once upon a
time (back in the 1980s), the Kodak Corporation manufactured instant
cameras and film. Today, you might be able to find an old Kodak instant
camera for sale on EBay, but they are no longer manufactured or sold by
Kodak. Why? It’s not because the cameras weren’t successful products --
Kodak sold more than 16 million of them. It’s because of patent law. The
Polaroid Corporation, the instant photography pioneer, sued Kodak,
claiming its cameras and film infringed on several Polaroid patents.
After 15 years of litigation, Polaroid won. Kodak was barred from
manufacturing or selling the cameras and film and had to pay almost $900
million in damages to Polaroid.

A Patent -- By Itself -- Won’t Make You Rich

However, before you jump on the patent bandwagon, be aware that
obtaining a patent is no guarantee of financial success. It is generally
estimated that less than 3% of patented inventions ever earn a dime for
their inventors. If you have an invention that people want, such as
instant photography, a patent can be enormously beneficial. But, if your
invention is worthless, your patent will be too. Of course, the problem
is that it’s often impossible to know in advance which inventions will
be successful and which will be failures

A Patent Can Help You License Your Invention

if, like most independent inventors, you don’t plan on manufacturing
and selling your invention yourself, obtaining a patent can make it
easier to license your invention to a manufacturer. Many companies
prefer to license patented inventions (or at least those for which a
patent application has been filed). Compared to trade secrets which can
be lost at any time, patents are a viewed as a “solid” investment,
easier to enforce and to value.

If you proceed with the patent application process, you can license
your invention before the patent is issued. Sometimes a licensee may
condition the license upon the granting of the patent. That is, if the
patent does not issue, the license is canceled or the royalties are
reduced to reflect only the nonpatentable aspects that have been
licensed.

Patents Can Help You Get Money

Obtaining, or at least filing for, patents can also help you obtain
financing. Consider the case of the brothers David and Gregory
Chudnovsky, both brilliant mathematicians who emigrated from Russia to
the U.S. in 1978. Over a period of two decades, they devised a number of
computer-related inventions that could have been quite valuable,
including a novel switching network. However, they never attempted to
patent any of these inventions. They talked to many potential investors
about helping to finance the development of their inventions; but,
although the investors liked the brothers’ inventions, none were willing
to put up any money. They were simply afraid to invest in an unpatented
invention. Then, in 1998, the Chudnovskys came up with one of their
best ideas yet -- a memory-addressing system that could substantially
speed up computer performance and become an industry standard. This
time, they decided to go for a patent. They lined up a group of
investors who put up the money to hire a patent law firm to file a
patent application for their complex invention and then help market it.
Their patent issued and they began to actively seek companies for
licensure.